Very big fuss over very small economy

President Barack Obama’s historic normalization talks with Cuba have brought about a lot of excitement in business circles, and hardly a day goes by without new reports of U.S. investors, lawyers and entrepreneurs flocking to the island. But I’m afraid most of them will lose their shirts there.

A dispassionate look at Cuba’s reality shows that, despite all the hoopla about last week’s U.S. removal of Cuba from its list of terrorist nations, which opened the way for re-establishment of full diplomatic relations between the two countries and international loans, Cuba remains one of the most backward countries in Latin America. And it will take many years to get its economy back to life.

Yes, Obama’s opening to Cuba is by an large a good idea. And, granted, there will be opportunities in the tourism industry to build new hotels. But the scope of these business opportunities will be much more limited than the Obama administration — eager for a foreign policy legacy-setting victory in the aftermath of its Middle East failures — is leading us to believe.

Consider the facts:

First, Cuba’s gross national income per capita, although nearly impossible to measure because the island does not measure its economy by international standards, is estimated by the World Bank at $5, 800 a year. That’s almost three times less than Chile’s per capita income of more than $15, 000 a year, and way below Latin America’s average of $9, 500 a year, according to World Bank figures.

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